Reviewers press proponents to clarify who pays for new natural-gas pipeline extensions

At the April 2 review, legislative staff described proposed initiative 3-12 as an amendment intended to prohibit utilities from shifting the costs of natural-gas pipeline extensions (and eventual decommissioning) to existing customers. The memorandum framed the single subject as "no cost shifting to existing customers for natural gas pipeline extension and decommission."

Staff asked several drafting questions: whether 'utilities' should include investor-owned utilities, cooperatives, and municipal systems; what the drafters meant by 'distributors' (and whether that term should be deleted); how to define 'existing customers' (for example, as of the effective date, start of construction, or decommissioning); and whether the prohibition covers maintenance costs in addition to construction and decommissioning. Proponents said they intend to prevent cost recovery through utility-bill rate increases for pipeline extensions that serve new customers and agreed to delete 'distributors' and to clarify definitions and cost categories in the text.

Staff also warned that existing contracts may allocate such costs and that the Colorado and U.S. constitutions bar laws that impair contractual obligations. They recommended an applicability clause stating the measure applies to contracts entered into on or after the effective date to avoid impairment-of-contracts claims; proponents agreed to add such a clause.

No formal vote occurred during the hearing. The proponents agreed to rework definitions and applicability language and to return with revised text for the record.